Sunday, October 28, 2007

Verizon Adds 203K FiOS TV Customers, 229K FiOS Internet Customers in Q3

Verizon Communications reported Q3 revenue of $23.8 billion, up 5.8 percent; up 6.0 percent on an adjusted basis (non-GAAP). Operating income for Q3 was $4.2 billion, up 19.0 percent over last year. Some highlights for the quarter:

  • Verizon Wireless added 1.8 million net retail customers and 1.6 million total net customers after reductions in wholesale customers. The company ended Q3 with 61.8 million retail (non-wholesale) customers and 63.7 million total customers.

  • Retail churn was 1 percent. Churn among retail post-paid customers at 0.96 percent was substantially lower.

  • Revenues totaled $11.3 billion, up 14.4 percent. Service revenues were $9.7 billion, up 15.1 percent, driven by customer growth and demand for data services.

  • ARPU levels were the company's highest ever: $52.17 retail service ARPU, up 1.9 percent year over year; $10.59 retail data ARPU, up 42.9 percent.

  • At the end of the quarter, more than half of the company's retail customers had broadband-capable devices.

  • Wireline

  • Added a net of 202,000 new FiOS TV customers. The company has 717,000 FiOS TV customers in total, with approximately 600,000 added within the past 12 months. Including satellite TV customers served in partnership with DIRECTV (a net of 85,000 added this quarter), Verizon has more than 1.5 million video customers.

  • Verizon added a net of 285,000 new broadband connections (DSL and FiOS Internet connections combined). Broadband connections totaled 8.0 million, an increase of 21.3 percent compared with the third quarter 2006. The company added a net of 229,000 FiOS Internet connections this quarter, for a total of 1.3 million.

  • ARPU in legacy Verizon wireline markets (which excludes former MCI consumer markets) increased 10.8 percent to $58.79, compared with last year's third quarter. This increase was due to strong demand for broadband and TV services.

  • Wireline operating income margin rose to 9.4 percent, compared with 8.8 percent in last year's third quarter.

  • As of the end of Q3, the FiOS network passed 8.5 million premises. Third-quarter EPS dilution from FiOS deployment and customer-acquisition costs was 9 cents. FiOS Internet was available for sale to 6.5 million premises in parts of 16 states by the end of the quarter. Penetration for the service averaged 20.0 percent across all markets. FiOS TV was available for sale to 4.7 million premises by the end of the quarter. Penetration for the service averaged 15.2 percent across all markets.

  • Verizon Business

  • Revenues of $5.3 billion, or growth of 2.2 percent compared with last year's third quarter on an adjusted basis (non-GAAP). This is Verizon Business' fourth consecutive quarter of year-over-year, pro-forma revenue growth (non-GAAP, calculated as if Verizon and MCI had merged on Jan. 1, 2005).

"Our third-quarter results show that we have hit our stride as a leading wireless, broadband and enterprise company," said Verizon Chairman and CEO Ivan Seidenberg. "In recent years, we have transformed our business model and revenue base. Our results throughout 2007, and especially in the third quarter, show that our strategy has been successful. We expect to build on these results in the fourth quarter and beyond."

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